Methods and Systems for Supporting Asset Exchange

ABSTRACT

In typical two-way trading systems, bidders cannot trade directly with other bidders, and sellers cannot trade directly with other sellers, resulting in possible missed trading opportunities. Methods, systems, devices, and networks for enabling two-way trading systems to perform multi-party exchanges are disclosed. Example embodiments allow multiple bidders (buyers), multiple sellers, or a seller and bidder of separate marketplaces to trade among themselves. Embodiments may discover, for bidders and sellers, opportunities to trade with other sellers or bidders, or both, without a time-consuming and limited process of searching and discovering relevant opportunities. Bidders and sellers may not find such opportunities on their own in typical two-way trading systems. The embodiments may be implemented as stand-alone systems or as add-ons that may be used to augment or enhance existing two-way trading systems.

RELATED APPLICATIONS

This application is a divisional of U.S. patent application Ser. No.13/572,227, filed on Aug. 10, 2012, which is a divisional of U.S. patentapplication Ser. No. 12/609,416, filed on Oct. 30, 2009, now U.S. Pat.No. 8,266,610, which claims the benefit of U.S. Provisional ApplicationNo. 61/197,818, filed on Oct. 30, 2008. The entire teachings of theabove applications are incorporated herein by reference.

BACKGROUND OF THE INVENTION

Many methods for asset exchange are prevalent, from public marketplacesto private marketplaces and online computer-enabled mechanisms tooffline human-managed environments. The Internet is commonly used forthe exchange of assets using multiple popular methods ranging frommirroring the simple classifieds section of a newspaper to more directsearch and trade or auction-based systems.

SUMMARY OF THE INVENTION

One embodiment for supporting asset exchanges between parties of anauction is a system that includes a transformation module thattransforms representations of bidders' auction bids into representationsof bidders' bidding assets and representations of bidders' bid-onauction assets. A bidder's “bidding asset” is defined as an asset thatthe bidder uses to place a bid (e.g., cash or other assets that havevalue). A bidder's “bid-on auction asset” is defined as an asset forwhich the bidder places a bid (i.e., an asset that the bidder seeks toacquire). A “representation” is any construct able to be operated on by,for example, a computer processor, or presented in its own form or otherform to, for example, a person or computer processor in a network nodeor server. The system also includes a translation module that translatesrepresentations of sellers' auction assets into vertices of a directedgraph and representations of sellers' auction desires into edges of thedirected graph, and that translates the representations of bidders'bidding assets into vertices of the directed graph and therepresentations of bidders' bid-on auction assets into edges of thedirected graph. The system further includes a cycle determination modulethat determines cycles in the directed graph. A cycle is defined as apath that starts and ends at the same vertex and that includes multipleedges and at least one intermediate vertex. Also included in the systemis an offer module that transforms the cycles into offers among theparties and that performs an action based on the offers.

The representations of sellers' auction desires may includerepresentations of desired assets with precise values, which may includecash, loyalty points, or an asset having a market value that isguaranteed, appraised, or certified for a specific value or value rangein cash or points.

The cycle determination module may determine whether a first cycleshares a vertex or edge with a second cycle, and the offer module maythen transform either the first cycle or the second cycle into an offerin an event the first cycle shares a vertex or edge with the secondcycle. The cycle determination module may prioritize the cycles based onrepresentations of preferences associated with the sellers' auctiondesires, or may sequence and prioritize the cycles according to presetparameters. Preset parameters may include parameters of exact matchesand inexact matches or parameters representing committed desires anduncommitted desires, and the cycle determination module may order thecycles from exact matches to inexact matches or from committed desiresto uncommitted desires according to the parameters.

A cycle may have a positive value if a total value offered in the cycleexceeds a total value demanded in the cycle, and the offer module maytransform cycles having positive values into offers and presentrepresentations of the offers to respective sellers. The offer modulemay further determine whether excess positive value exists in a cycleand may direct the excess positive value to a seller, bidder, or assetexchange intermediary. In an event a cycle has a negative value, theoffer module may make a determination whether one or more partiesinvolved in the cycle is or are willing to (i) accept an offer that isof lesser value than their respective desired asset or (ii) offer morevalue than their respective desired offer, and may adjust therepresentations of the parties' auction desires based on thedetermination.

The offer module may present representations of the offers to thesellers if the sellers' auction desires are not met or may execute assetexchanges between the sellers and bidders if the sellers' auctiondesires are met. Alternatively, the offer module may presentrepresentations of the offers to the sellers or execute an assetexchange based on asset exchange parameters set by the sellers andbidders. The offer module may close an offer upon acceptance of theoffer by the corresponding sellers, decline of the offer by one of thecorresponding sellers, or reaching a timeout associated with the offer.The offer module may also transform a cycle into a contingent offer ifthe cycle includes representations of three or more parties, thesellers' auction desires are not exactly matched, or the cycle has anassociated timeout that is set to be reached at a given time in thefuture.

The system may also include an interface to multiple auctions or tradingforums occurring at the same time, where the interface enables a partyof the auction to list an auction asset in at least one of the multipleauctions or trading forums, and may further include a monitor modulethat monitors the multiple auctions or trading forums and, in an eventthe party's auction asset is exchanged or sold in one of the auctions ortrading forums, withdraws the party's auction asset from the remainingauctions or trading forums.

Another embodiment for supporting asset exchanges between parties of anauction is a method that includes transforming representations ofbidders' auction bids into representations of bidders' bidding assetsand representations of bidders' bid-on auction assets, translatingrepresentations of sellers' auction assets into vertices of a directedgraph and representations of sellers' auction desires into edges of thedirected graph, and translating the representations of bidders' biddingassets into vertices of the directed graph and the representations ofbidders' bid-on auction assets into edges of the directed graph. Themethod also includes determining cycles in the directed graph,transforming the cycles into offers between the parties, and performingan action based on the offers.

An embodiment for operating an auction includes a method that includestransforming a representation of a first party's role in the auction byoffering an asset, in the form of a representation of the asset, of thefirst party to a second party in exchange for an asset of the secondparty.

Transforming the representation of a first party's role may include (i)transforming a representation of a first seller of a first auction assetinto a representation of a bidder of a second auction asset of a secondseller by offering the first auction asset, in the form of arepresentation of the first auction asset, to the second seller inexchange for the second auction asset, (ii) transforming arepresentation of a first bidder, bidding for a bid-on asset and havinga first bidding asset, into a representation of a seller by offering thefirst bidding asset, in the form of a representation of the firstbidding asset, to a second bidder, who is also bidding for the bid-onasset and who has a second bidding asset, in exchange for the secondbidding asset, or (iii) transforming a representation of a first bidder,bidding for a first bid-on asset and having a first bidding asset, intoa representation of a seller by offering the first bidding asset, in theform of a representation of the first bidding asset, to a second bidder,who is bidding for a second bid-on asset different from the first bid-onasset and who has a second bidding asset, in exchange for the secondbidding asset.

The method may also include obtaining relevant information about one ormore wide area network marketplaces, detecting multi-party tradingopportunities based on the relevant information, transformingrepresentations of the opportunities into initial or revised offers forparties relevant to the trading opportunities, and communicatingrepresentations of the offers to the parties. In some embodiments, therelevant information may be obtained using a network crawler designed towork with one or more of the wide area network marketplaces or through adirect interface or connection between a trading server and one or moreof the wide area network marketplaces.

Another embodiment for operating an auction is a method that includesoffering a bidder's bidding asset, in the form of a representation ofthe bidding asset, to a seller of an auction asset in exchange for theseller's auction asset, the bidder already bidding on a bid-on auctionasset that is different from the seller's auction asset.

Another embodiment is an asset exchange server that includes anactivation module that activates seller nodes to enable participation ofsellers in the asset exchange marketplace and that activates biddernodes to enable participation of bidders in the asset exchangemarketplace. The asset exchange server also includes a transformationmodule that facilitates offering and bidding exchanges among the sellerand bidder nodes as a function of representations of the sellers'auction assets and auction desires and the bidders' bidding assets andbid-on auction assets, and that transmits messages to the seller andbidder nodes to cause the nodes to recognize a state of an exchange ofthe sellers' and bidders' assets.

The seller nodes may include a first seller node and a second sellernode, where a first auction asset is associated with the first sellernode, and where a second auction asset is associated with the secondseller node. In such a configuration, the transformation module maytransform a state of the first seller node into a bidder node bytransmitting a message to the second seller node, where the messageincludes a representation of an offer to exchange the first auctionasset for the second auction asset.

The bidder nodes may include a first bidder node and a second biddernode, where a first bidding asset is associated with the first biddernode, and where a second bidding asset is associated with the secondbidder node. In such a configuration, the transformation module maytransform a state of the first bidder node into a seller node bytransmitting a message to the second bidder node, where the messageincludes a representation of an offer to exchange the first biddingasset for the second bidding asset.

An embodiment for operating an asset exchange marketplace is a methodthat includes activating seller and bidder nodes to enable participationof sellers and bidders in the asset exchange marketplace, facilitatingoffering and bidding exchanges among the seller and bidder nodes as afunction of representations of the sellers' auction assets and auctiondesires and the bidders' bidding assets and bid-on auction assets, andtransmitting messages to the seller and bidder nodes to cause the nodesto recognize a state of an exchange of the sellers' and bidders' assets.

An embodiment for supporting asset exchanges in a network is a devicethat includes communication ports associated with respective entityinterface devices, where communication ports associated with sellingentity interface devices are in a selling state, and where communicationports associated with bidding entity interface devices are in a biddingstate. The device also includes a processor that changes the state of acommunication port from a selling state to a bidding state, or a biddingstate to a selling state, by transmitting over a given communicationport a message including a representation of an offer for an assetassociated with another communication port.

BRIEF DESCRIPTION OF THE DRAWINGS

The foregoing will be apparent from the following more particulardescription of example embodiments of the invention, as illustrated inthe accompanying drawings in which like reference characters refer tothe same parts throughout the different views. The drawings are notnecessarily to scale, emphasis instead being placed upon illustratingembodiments of the present invention.

FIG. 1 is a depiction of inter-connected marketplaces for auctions,using computer networks including, for example, the Internet. The figuredepicts the presence of various parties that facilitate or participatein the auction process. The parties include sellers, bidders, assetexchange intermediary, and insurer that are involved with the auction ortrading platform. The figure further depicts a seller's asset manager,which may be a computer system, and, similarly, a bidder's assetmanager, which may also be a computer system.

FIG. 2 illustrates a barter auction where a system has detected anopportunity for bidders to trade among themselves in a multi-partytrade.

FIG. 3 illustrates an auction marketplace where a system has detected anopportunity for two bidders in a specific auction to trade amongthemselves without engaging with a seller of the auction.

FIG. 4 illustrates inter-connected marketplaces for auctions, usingcomputer networks including, for example, the Internet, where a systemhas detected an opportunity for bidders' bidding in two differentauctions across two different marketplaces to trade among themselves.

FIG. 5 is a flow chart illustrating a method of supporting assetexchanges between parties in a marketplace. The figure illustrates thatinformation is translated into edges and vertices of a directed graphby, for example, a computer program. The actions further illustratesthat multi-party trading opportunities are detected in the form ofcycles in the graph, which are transformed into offers for the partiesof the marketplace.

FIG. 6 is a block diagram illustrating a system for supporting assetexchanges between parties in a marketplace.

FIG. 7 is a network diagram illustrating a network for supporting assetexchanges between parties in a marketplace.

FIG. 8 is a block diagram illustrating a device for supporting assetexchanges over a network.

FIG. 9 illustrates a directed graph of an example embodiment of theinvention.

FIG. 10 illustrates an English auction where a system has detected abarter trade opportunity.

FIG. 11 illustrates a hybrid barter auction with a possible multi-partytrade across marketplaces, as well as an opportunity for an arbitrage.

FIG. 12 illustrates inter-connected marketplaces for auctions, usingcomputer networks including, for example, the Internet, where a systemhas detected an opportunity for one seller to trade directly withanother seller.

FIG. 13 illustrates a system that interacts with wide area networkmarketplaces using either a direct connection or a network crawler toenable multi-party trading opportunities.

FIG. 14 illustrates an example interface to a hybrid barter auction.

FIG. 15 illustrates an example interface to a hybrid barter auctionwhere an offer to a party is presented after the party's auctioninformation has been processed by the system.

FIG. 16 illustrates an English auction where a system has detectedmulti-party opportunities across auctions and marketplaces that resultin a part-barter, part-auction, and part-retail purchase.

FIG. 17 illustrates inter-connected marketplaces for auctions, usingcomputer networks including, for example, the Internet, where a systemhas detected an opportunity for bidders' bidding in auctions to tradewith sellers in whose auctions they have not bid.

DETAILED DESCRIPTION OF THE INVENTION

A description of example embodiments of the invention follows.

A two-way trade is defined as one where the resulting trade is betweentwo parties, namely, a buyer and a seller. An auction is a two-way tradein which the final transaction is between two parties (i.e., a sellerand a buyer). An embodiment of the present invention can be applied tothe exchange of assets in auction systems that may be deployed online oroffline and optionally using third-party proprietary software platforms.Specifically, one example embodiment enables the transformation of atwo-party auction trading system to a multi-party asset exchange ortrading system. A multi-party asset exchange or trading system allowstwo or more parties to participate in trading opportunities in a mannerin which the sellers and buyers find opportunities to trade amongthemselves. In this type of system, sellers may find ways to trade withother sellers and bidders may find ways to trade with other bidders.

One embodiment of the present invention is a system that transformsauctions that are ‘two-way transaction’ marketplaces into interconnectednetworks of multi-party auction transactions. The embodiment also allowsthe exchange of assets between and among sellers, buyers, and assetexchange intermediaries that are otherwise not possible in a two-waytrading system.

Embodiments of the present invention may be implemented using acomputerized system designed to transform and enable two-way auctionplatforms to perform multi-party exchanges. The system may be designedto work with any user interface, such as, for example, an Internetauction site or private auction trading system. The computerized systemmay be used as a stand-alone system or as an add-on system that can beused to augment or enhance an existing two-way auction-based tradingsystem, either online or offline, to enable multi-party exchangecapabilities. The system can either extract or receive information aboutparties that interact through the user interface, and such informationcan be extracted or received in an automated manner.

FIG. 1 is a depiction of inter-connected marketplaces for a auction 100.The parties of the example marketplace include a seller 105, bidders 110a-n, an insurer 115, and other third-party facilitators, such as anexchange intermediary 120. The system of FIG. 1 provides for an assetmanagers 125 and 130 a-n, which are facilitating tools that are used tostore sellers' and bidders' asset information, respectfully, and otherauction and bid details. An asset manager allows the configuration ofvarious parameters pertaining to an auction or a bid. FIG. 1 furtherrepresents a marketplace 100 in the form of a network cloud. Everyauction marketplace has its own cast of players that can participate inthe marketplace, including bidders 110 a-n, sellers 105, exchangeintermediaries 120, and insurers 115. All of these roles are illustratedin the figure. FIG. 1 also shows that one marketplace 100 can beconnected to another marketplace 135 through a method of networking orcommunication, such as, for example, the Internet or other wide areanetwork. The mixing of bidders and sellers along with their assetsacross auction marketplaces 100, 135 is represented in the dots andboxes drawn above the connecting line between the two marketplaces 100,135.

Several example embodiments are described below. For example, FIG. 2illustrates an embodiment in a barter auction marketplace. FIG. 10illustrates an embodiment in a currency-based English auctionmarketplace, FIG. 11 illustrates an embodiment in a hybrid“barter-plus-cash” auction marketplace, FIG. 16 illustrates anembodiment in a hybrid “barter-plus-cash” auction marketplace in thecontext of an English auction. A barter auction is an auction in whichcurrency need not be used as a facilitator. In this type of auction, theseller puts up his asset for auction, and bidders bid on the asset, notnecessarily with cash, but with any other asset. The seller then choosesthe bidder whose bid he wants to accept. In all of these auctionsystems, however, the end result is always a two-way trade between onebidder and one seller.

FIG. 2 illustrates a barter auction where a system has detected anopportunity for bidders to trade among themselves in a multi-partytrade. The auction is in the context of auctions of holidays at vacationhomes. This barter auction marketplace has three sellers, A 205 a, B 205b, and C 205 c, who have their own barter auctions. Seller A 205 a hasan auction for a holiday at his vacation home in Hawaii for the week ofChristmas 2008, starting the Friday before Christmas 2008 (215 a).Seller B 205 b has an auction for a holiday at his vacation home inMalaga, Spain for the week of Christmas 2008, starting the Friday beforeChristmas 2008 (215 b). Seller C 205 c has an auction for a holiday athis vacation home in London, England for the week of Christmas 2008,starting the Friday before Christmas 2008 (215 c).

The barter auction also has three bidders, X 210 x, Y 210 y, and Z 210z, one bidder for each of the auctions of sellers A 205 a, B 205 b, andC 205 c. Bidder X 210 x places a bid in seller A's 205 a auction usinghis asset 220 x, which is a holiday for the week of Christmas 2008,starting the Friday before Christmas 2008 at his vacation home inLondon. Bidder Y 210 y places a bid in seller B's 205 b auction usinghis asset 220 y, which is a holiday for the week of Christmas 2008,starting the Friday before Christmas 2008 at his vacation home inHawaii. Bidder Z 210 z places a bid in seller C's 205 c auction usinghis asset 220 z, which is a holiday for the week of Christmas 2008,starting the Friday before Christmas 2008 at his vacation home inMalaga, Spain.

In the above auctions, while it is not clear whether each seller 205 a-cwill accept the bids made by the bidders 210 x-z in the separateauctions that could take place across multiple marketplaces, it is clearthat there is a trading opportunity among the three bidders 210 x-z.This is possible because Bidder X 210 x has revealed a desire to go toHawaii by bidding on Seller A's 205 a auction. Likewise, Bidders Y 210 yand Z 210 z have revealed desires to go to Hawaii and London,respectively. Thus, a multi-party trade can take place among the bidders210 x-z across the multiple auctions such that (i) bidder X 210 x takesbidder Y's 210 y Hawaii asset 220 y, (ii) bidder Y 210 y takes bidderZ's 210 z asset in Malaga 220 z, and (iii) bidder Z 210 z takes bidderX's 210 x asset in London 220 x.

FIG. 3 illustrates a variation of the above example. According to theexample embodiment of FIG. 3, there are two bidders 1 110 a and 2 110 bthat exchange their assets 305 a, 305 b among themselves within the sameauction 100. The exchanges are depicted by a curved line from bidder 1110 a to bidder 2 110 b with an arrow directed at bidder 2 110 b showingthat bidder 1 110 a is offering his asset to bidder 2 110 b and anothercurved line from bidder 2 110 b to bidder 1 110 a with an arrow pointingat bidder 1 110 a showing that bidder 2 110 b is offering his asset tobidder 1 110 a.

Such an exchange is enabled by allowing the system to infer the bidders'110 a, 110 b alternate desires through multiple methods, including anexplicit representation of those desires by the bidders 110 a, 110 b.The explicit representations, for example, can be registered throughasset managers 130 a, 130 b, or can be inferred from past transactionhistories within the same or other marketplaces, past or present bids,and/or auctions within the same marketplace or other marketplaces. Sucha system of trades among the bidders of multiple auctions is alsopossible across multiple auctions in multiple marketplaces.

FIG. 4 illustrates inter-connected marketplaces where a system hasdetected an opportunity for bidders' bidding in two different auctionsacross two different marketplaces to trade among themselves. Informationfrom two different marketplaces 100, 135 as depicted by the two cloudscan be retrieved using a device, such as, for example, a “crawler”(i.e., a system which automatically searches and discovers informationon a network). The system identifies an opportunity between bidder 1 110a, in asset exchange auction 1 100 from one marketplace, and bidder 2410, in asset exchange auction 2 135 from another marketplace, toexchange their assets 305 a, 415. The opportunity for exchange amongbidder 1 110 a and bidder 2 410 is shown via arrows crossing the twoclouds. The lines are denoted as dotted lines as they traverse their ownmarketplace and as solid lines as they cross marketplaces. The directionof the arrows shows the exchange from bidder 1 110 a to bidder 2 410.Additionally, a third straight line connecting the two clouds depictsthat the two marketplaces 100, 135 are interconnected.

Multiple methods may be used to enable two-way auction platforms toperform multi-party exchanges. In one embodiment, a system translatesinformation pertaining to a seller's asset and desires in an auctioninto a directed graph, representing the information as edges andvertices of the graph. Similarly, the embodiment translates bidders'bidding assets and bid-on assets into edges and vertices of the graph. A“graph” in this context refers to a collection of vertices and edgesthat connect pairs of vertices. Typically, a graph may be undirected,meaning that there is no distinction between the two vertices associatedwith each edge, or a graph may be directed, meaning that its edges arebe directed from one vertex to another.

A bidder's “bidding asset” is defined as an asset that the bidder usesto place a bid. This is often cash, but it could also be other assetsthat have value. A bidder's “bid-on asset” is defined as an asset forwhich the bidder is bidding (i.e., the asset that the bidder seeks toacquire). The system uses this information from the two-way tradingsystems, along with the sellers' and bidders' information, to detectmulti-party trading opportunities that do not restrict the parties totheir specific auctions or two-way trades. In addition, the systemrepresents the multi-party opportunities as offers to sellers andbidders who can, in this way, trade among each other and across multipleauctions that are part of different marketplaces.

The system may, thus, allow multiple bidders (buyers) to trade amongthemselves as described above in FIGS. 2-4, trade with other sellers, orboth. The system may discover in an automated manner, for bidders andsellers, opportunities to trade with other sellers or bidders, or both,without the time-consuming and/or naturally limited process of searchingand discovering relevant opportunities. Bidders and sellers may not findsuch opportunities on their own in typical two-way auction tradingplatforms. In the known art, bidders cannot trade directly with otherbidders, and sellers cannot directly trade with other sellers in anauction or two-way trading environment.

FIG. 5 is a flow chart illustrating a method of supporting assetexchanges between parties in a marketplace, according to one exampleembodiment. According to the example embodiment, sellers' auction assetsare translated the into vertices of a directed graph, and the sellers'desires are translated into edges of the graph (505). In the exampledescribed above with reference to FIG. 2, the sellers' auction assetsare translated into a vertices, but because the sellers did not revealdesires, no edges are observed from the data.

Bidders' auction bids are transformed into representations of biddingassets and bid-on auction assets (510). The bidders' revealed desires,indicated by the assets they bid for, are the bidders' bid-on assets,while the bidders' own property, with which they bid, are the bidders'bidding assets. Bidders' bid-on assets are translated into edges of thegraph. For example, with reference to FIG. 2, bidder X 210 x hasrevealed a desire to go to Hawaii by bidding on seller A's 205 aauction. This desire is transformed into the bidder's bid-on asset andis translated into an edge of the graph. Bidders' bidding assets aretranslated into vertices of the graph. For example, bidder X's 210 x ownasset 220 x, which he used to place a bid (i.e., his asset in London),is translated into a vertex of the graph. Similarly, other bidders'bidding and bid-on assets are also translated into directed graphcomponents (515).

Cycles in the graph are then determined (520). A cycle is defined as apath that starts and ends at the same vertex and that includes multipleedges and at least one intermediate vertex. Cycles are also known as“closed paths” meaning that the path has no repeated vertices or edgesother than the starting and ending vertex. A closed path in a directedgraph may be referred to as a “closed directed path.” Cycles may bedetermined in a variety of ways. One example way to determine cycles ina graph is to perform a depth-first traversal of the graph, maintaininga stack that contain all vertices in a current depth-first traversal ofthe graph. During the traversal, if an element is encountered that isalready in the stack, such an encounter indicates a cycle. In theexample of FIG. 2, one such cycle exists among bidders X 210 x, Y 210 y,and Z 210 z. While FIG. 2 illustrates a multi-party trade discoveredamong the bidders, cycles may also exist among sellers or among bothsellers and bidders.

In determining the cycles of the graph, the example embodiment mayensure that when multiple cycles are determined, no vertex is sharedacross multiple cycles. In other words, disjoint cycles are determined.In terms of the embodiment in FIG. 4, the example embodiment may ensurethat a bidder's bidding asset, such as bidder X's asset of a holidayweek in London, is only used in satisfying the needs of one other party,namely bidder Z, and is not simultaneously used to satisfy multipleparties, which would result in a conflict.

The cycles are then transformed into offers among the parties of themarketplace (525), and an action is performed based on the offers (530),e.g., presenting, accepting, rejecting or modifying the offers.

FIG. 6 is a block diagram illustrating a system 600 for supporting assetexchanges between parties in a marketplace, according to another exampleembodiment. The system includes representations of bidders' auction bids615, sellers' auction assets, and sellers' auction desires 610 stored inmemory 605, such as, for example, a database. The system also includes atransformation module 620 that transforms the representations of thebidders' auction bids 615 into representations of bidders' biddingassets and representations of bidders' bid-on auction assets 625. Thesystem further includes a translation module 630 that (i) translates therepresentations of sellers' auction assets 610 into vertices of adirected graph 635 and the representations of sellers' auction desires610 into edges of the directed graph 635 and (ii) translates therepresentations of bidders' bidding assets 625 into vertices of thedirected graph 635 and the representations of bidders' bid-on auctionassets 625 into edges of the directed graph 635. Also included in thesystem is a cycle determination module 640 that determines cycles 645 inthe directed graph 635, and an offer module 650 that transforms thecycles 645 into offers among the parties and that performs an actionbased on the offers.

FIG. 7 is a network diagram illustrating a network 700 for supportingasset exchanges between parties in a marketplace, according to anotherexample embodiment. The network includes seller nodes 705 a-c thatrepresent, or are associated with, sellers of the auction, and biddernodes 710 a-c that represent, or are associated with, bidders of theauction. The network also includes a server 725 that is in communicationwith the nodes 705 a-c, 710 a-c and that transforms a seller node 705a-c into a bidder node (or a bidder node 710 a-c into a seller node) bytransmitting, to a given node, a message that includes an offer for anasset 715 a-c, 720 a-c associated with another node.

For example, the seller nodes may include at least first seller node 705a and a second seller node 705 b, where a first auction asset 715 a isassociated with the first seller node 705 a and a second auction asset715 b is associated with the second seller node 705 b. In such anexample, the server 725 may transform the first seller node 705 a into abidder node by transmitting a message 730 to the second seller node 705b including an offer to exchange the first auction asset 715 a for thesecond auction asset 715 b. Additionally, the bidder nodes may includeat least a first bidder node 710 a and a second bidder node 710 b, wherea first bidding asset 720 a is associated with the first bidder node 710a and a second bidding asset 720 b is associated with the second biddernode 710 b. In this example, the server 725 may transform the firstbidder node 710 a into a seller node by transmitting a message 735 tothe second bidder node 710 b including an offer to exchange the firstbidding asset 720 a for the second bidding asset 720 b.

The server 725 may activate the seller nodes 705 a-c and bidder nodes710 a-c by transmitting processor instructions, data, codes, or otherelectronic messages or commands to a processor or software operating onthe nodes, such as, for example, a graphical user interface (GUI)Internet browser. For example, sellers and bidders may navigate, e.g.,type in a uniform resource locator (URL) into a browser or otherwisenavigate to the URL to access a webpage (not shown) or other environmentin a domain supported by the server 725, to participate in an auction.Responsively, the server 725 may send messages or commands (not shown)to the nodes that cause the browsers to change their respective states(e.g., display information and user interface elements) to enable thesellers and bidders to participate in auction(s) in asset exchangemarketplace(s). Subsequent messages or commands, for example, messages730 and 735, may be sent by the server 725 to cause the nodes (orbrowsers) to change states (e.g., transform from a selling state to abidding state).

FIG. 8 is a block diagram illustrating a device 800 for supporting assetexchanges over a network, according to another example embodiment. Thedevice includes a number of communication ports 805 a-e, 810 a-cassociated with respective entity interface devices 815 a-e, 820 a-c.Communication ports 805 a-e that are associated with selling entityinterface devices 815 a-e are in a selling state, and communicationports 810 a-c associated with bidding entity interface devices 820 a-care in a bidding state. The device also includes a processor thatchanges the state of a communication port 805 a-e, 810 a-c from aselling state to a bidding state (or a bidding state to a selling state)by transmitting over a given communication port a message 830 includingan offer for an asset associated with another communication port.

It should be understood that sellers and bidders and their respectiveidentities, node addresses, port addresses, representations of assetsand desires, states, and other information used to enable variousembodiments disclosed herein can be maintained in any or combinations ofany different forms of operating storage, such as, for example, tables,vectors, matrices, or databases, in any combinations of operating oraccessible computer readable media, such as, for example, random accessmemory (RAM), magnetic media, optical media, Flash memory, or othermemory types known in the art.

FIG. 9 illustrates a cycle 905 in a graph 900 using an example similarto that of FIG. 2. FIG. 9 shows that the cycle 905 need not include allof a graph's vertices 910 a-d and edges 915 a-e that are extracted fromthe auction marketplace. According to the example embodiment of FIG. 9,there are four parties in the marketplace. Party 1 has the week ofChristmas, 2008 in Hawaii that he has placed in a barter auction, andhas expressed desires to go to either Malaga or Lisbon. This isrepresented by two directed edges 915 a, 915 d (line segments) leadingfrom the circle which denotes the vertex 910 a representing the Hawaiiasset. This vertex 910 a is the seller's auction asset. Likewise, Party2 has a vertex 910 b representing an asset that he has placed in anauction, which is a week in London for Christmas 2008. Party 2 has adesire to go to Hawaii for Christmas 2008, as represented by a directededge 915 b from that vertex 910 b. Similarly, Party 3 has a vertex 910 crepresenting an asset that he has placed in an auction, which is a weekin Malaga for Christmas 2008. Party 3 has a desire to go to London forChristmas 2008, as represented by a directed edge 915 c from that vertex910 c. Finally, Party 4 has a vertex 910 d representing an asset that hehas placed in an auction, which is a week in Lisbon for Christmas 2008.Party 4 has a desire to go to Paris for Christmas 2008, as representedby a directed edge 915 e from that vertex 910 d.

In a typical barter auction (i.e., two-way trading system) there wouldnot be any bids in any of the auctions, as the desires 915 a-e andassets 910 a-d of the parties do not match. However, using themulti-party trade detection system, a cycle 905 is formed among parties1, 2, and 3, such that party 2 gets party 1's asset 910 a, party 1 getsparty 3's asset 910 c, and party 3 gets party 2's asset 910 b. However,there exists a vertex 910 d and edges 915 d, 915 e that cannot be a partof the cycle 905, because there is no vertex that matches the desire ofParty 4, even though Party 4's asset 910 d does match Party 1's desire915 d. Finally, in the above auctions, despite there being no bids, atrade among the sellers is discovered by the multi-party trade detectionsystem.

FIG. 10 illustrates an example embodiment in the context of an Englishauction, such as those found in websites, such as eBay® or numerousother auction websites. According to the example embodiment, party A1010 a may be a seller in auction X 1005 x for item 1 1015 a and as abidder in another auction Y 1005 y for item 2 1015 b. Similarly, party B1010 b may be a seller in auction Y 1005 b for item 2 1015 b and abidder in auction X 1005 a for item 1 1015 a. Party A 1010 a has bid$100 for item 2 1015 b in Auction Y 1005 y and party B 1010 b has bid$100 for item 1 1015 a in Auction X 1005 x. In this instance, party A1010 a, as a seller in Auction X 1005 x, has his asset (item 1) 1015 atranslated into a vertex of a graph, and party A's 1010 a desire foritem 2 1015 b, as a bidder in Auction Y 1005 y, is translated into anedge of the graph. Similarly, party B's 1010 b information is translatedinto an edge and a vertex of the graph, and the system determines acycle so that offers can be made to party A 1010 a and party B 1010 b toexchange their assets.

The example illustrated in FIG. 10 can be extended to generate tradingopportunities across multiple parties that may be only bidders, onlysellers, or both for cash auctions. For sellers whose desires cannot beassessed by way of their bids in other auctions, the system may inferdesires for the cash amounts they would like to receive for their ownassets by using methods to determine any amount based on: (i) theirstated reserve price, which is the price below which they will not sellat any point in time, (ii) the fixed price at which they are willing tosell any time regardless of when the auction listing is set to expire(commonly known as the “Buy Now” price on many auction sites, (iii) thehighest bid price at a given point in time, (iv) other characteristicsabout the auction listing, or (iv) a combination of these factors.

FIG. 11 illustrates a hybrid barter auction with a possible multi-partytrade across marketplaces, as well as an opportunity for an arbitrage. Ahybrid barter auction is different from an English cash auction in thata seller in the auction can place a non-cash item as the seller'sauction asset. In a hybrid barter auction, sellers also state theirdesires in the form of a non-cash item along with a cash component,which together can be construed as the desired price.

The possible results in this positive value cycle hybrid barter auction:

-   -   1. No Arbitrage Solution: Party A receives the Malaga week plus        $300 and gives their week to Party C, Party B receives their        week in London but only pays an additional $300.    -   2. Arbitrage Solution: same as above expect Party B pays $500        instead of $300 and the intermediary keeps the arbitrage or        could be shared with any of the parties.

According to the example embodiment, the auction is a hybrid barterauction where cash and non-cash assets are used. Party A 1110 a is aseller who places his week of holiday in Hawaii for Christmas 2008 1115a in marketplace Alpha 1105 a. Party A 1110 a may use an asset managerthat allows him to register his desires. Party A 1110 a indicates adesire 1120 a to go on a holiday to Malaga, Spain for the week ofChristmas 2008, and indicates that he expects to receive $300 cash. Thissuggests that Party A 1110 a believes the week of holiday in Hawaii forChristmas 2008 1115 a is worth more than a week of holiday in Malaga forChristmas 2008 1120 a.

In a completely different marketplace Beta 1105 c, Party B 1110 bcreates another hybrid barter auction as a seller, in which the seller'sauction asset 1115 b is a week of holiday in Malaga for Christmas 2008.Party B 1110 b indicates a desire 1120 b to get a week of holiday inLondon for Christmas 2008 and a willingness to pay $500 in addition toproviding the week in Malaga.

In a third marketplace Gamma 1105 c, Party C sets-up a third barterauction, in which the seller's auction asset 1115 c is a week in Londonfor Christmas 2008. Party C 1110 c indicates a desire 1120 c to get aweek of holiday in Hawaii for Christmas 2008 but does not add any cashcomponent to the desire. Thus, Party C 1110 c neither desires to pay nordemand additional cash for the week in Hawaii for Christmas 1120 c.

The example embodiment identifies a positive cash cycle in the exampleof FIG. 11. A “positive cash cycle” is defined as a cycle in which thetotal value offered exceeds the total value demanded. Thus, in thiscycle, the total value offered that can be precisely measured throughcash components is $500, and the total value demanded that can beprecisely measured through cash components is $300. Thus, a cycle in theexample embodiment involves party B 1110 b paying party A 1110 a $300and receiving party C's 1110 c selling asset 1115 c, which is the weekof holiday in London. Party A 1110 a receives $300 cash from party B1110 b plus his selling asset 1115 b, which is a week of holiday inMalaga, Spain for Christmas 2008. Party C 1110 c receives party A's 1110a selling asset 1115 a, which is a week of holiday in Hawaii with noadditional cash component in the trade.

In the above embodiment, the generated cycle is then transformed intooffers, which may be communicated to the parties in the cycle forpossible acceptance. Also, in the above cycle, an exchange intermediarymay undertake the role of presenting and coordinating the offers. Suchan intermediary may choose to take advantage of an arbitrage of valuethat is present in the cycle. In other words, party B 1110 b is willingto pay $500 and yet only $300 is demanded in the cycle by party A 1110a. Thus, the intermediary may take advantage of such an asymmetrypresent across the auctions 1105 a-c and participating parties 1110 a-csuch that party B's 1110 b original offer may be accepted whilefacilitating the exchanges between all parties 1110 a-c, and theadditional $200 can be retained as an arbitrage by the intermediary. Thearbitrage may also be divided among the parties 1110 a-c in a variety ofways or given back to party B 1110 b in its entirety as described above.

In the same example, if party B 1110 b offered only $200, the examplescenario would be a negative value cycle, in which the sum of the valueoffered that can be precisely measured through cash components isgreater than the sum of the value demanded that can be preciselymeasured through cash components. In this situation, revised offers maybe constructed and communicated to the parties. For example, it ispossible to ask party B 1110 b for an additional $100, or the differencemay be divided equally among all parties 1110 a-c such that party B 1110b is asked to pay $33.33, party C 1110 c is asked to pay $33.33, andparty A 1110 a is asked to accept $33.33 less than what was originallydemanded. Alternatively, other rules may be deployed to handle thedifference. Finally, there may also be a neutral value cycle where theprecisely measured components in the cycle are balanced, such as thetotal cash demanded being equal to the total cash offered.

The parties of such auction marketplaces may pre-commit themselves intoaccepting what they have stated as their desires if they are met. Inthis case, when an offer to a party matches the party's desire, thesystem does not communicate offers for acceptance; rather, the systemautomatically executes the trades. Additionally, in another embodimentof the invention, these offers may be subject to a time window withinwhich the offers need to be accepted; otherwise, the offers expire. Therejection of an offer by one party in the cycle may also causes theentire cycle to fail, resulting in nobody being able to realize theoffer. Therefore, in some embodiments, offers may be contingent on theacceptance of all parties to the trade.

In some embodiments, sellers may state multiple desires and rank them toshow their preferences, and likewise, an implied preference ranking maybe revealed by evaluating multiple bids that a bidder may make. Suchrankings may be used in the process of choosing the disjoint cycles bythe system that are transformed into offers for the parties involved inthe possible trade.

Additionally, in hybrid barter auctions where sellers reveal theirdesires, some embodiments of the system have sellers trade amongthemselves as illustrated in FIG. 12. In this example, there are twosellers 1 105 and 2 405 in two different marketplaces 100, 135, depictedby two clouds. FIG. 12 shows that the sellers 105, 405 may exchangetheir assets 1205 a, 1205 b across these marketplaces 100, 135 insteadof having a seller first sell his asset for cash and then use the cashto buy the other's asset. Such an exchange is enabled by allowing thesystem to infer the sellers' desires through multiple methods, includingan explicit representation of those desires. Embodiments of the systemmay use criteria to guide the cycle determination process such that inprocessing multiple cycle opportunities, any ordered preferencesrevealed by the sellers and bidders in the auctions are either strictlyor partially adhered to. Opportunities are also chosen in such a way asto favor one or more parties depending on rules established for thesystem.

An example embodiment of a system that extracts information abouton-going auctions in online public marketplaces, along with thecorresponding parties information, is shown in FIG. 13 in the form of anautomated crawler 1305 that crawls Internet auction marketplaces andthat acquires such information. According to the example embodiment, twoInternet marketplaces 100, 135 are depicted in the form of two clouds,and there is at least two methods by which relevant information may beexchanged between the marketplaces 100, 135 and a trade server 1310.Method A shows the use of automated crawling technology 1305 to crawlvarious marketplaces 100, 135 on a wide area network, such as, forexample, the Internet, to exchange information. Method B depicts directinterfaces 1315 a, 1315 b between the marketplaces 100, 135 and thetrade server 1310.

The trade server 1310 broadly serves the function of sending, receiving,storing, capturing, categorizing, and transforming data based on rulesand parameters configured in the system. The trade server 1310 thencommunicates with a multi-party trade detect system 1320, which is useddetect various multi-party trading opportunities. The multi-party tradedetect system 1320 then passes the detected opportunities to an offermanagement system 1330, which creates and manages offer until they areeither accepted or rejected. The offer management system 1330 maycommunicates any offer-related information to the trade server 1310,which may pass the information back to the relevant participants withinthe marketplaces 100, 135.

FIG. 14 illustrates an example interface to a hybrid barter auction. Asshown, a seller 1405 has listed an asset 1410, which is a week startingSeptember 30 at North Lake Lodges and Villas in Lake Tahoe. The seller1405 has also listed his desires 1415 for either a vacation in SanAntonio or a vacation at Harbor View Villas. The seller 1405 has alsoindicated that he would offer $200 in addition to their week to get avacation at Harbor View Villas and demands an additional $100 in orderto trade his week for a vacation in San Antonio. Both of these desires1415 are shown as being uncommitted desires. If matched, the seller 1405is willing to consider these matches, as the seller 1405 has indicatedthat they are “favorite,” but not “committed,” desires.

FIG. 15 illustrates the example interface to the hybrid barter auctionwhere an offer to the party 1405 (FIG. 14) is presented after theparty's auction information has been processed by the system. Under thesection titled “MultiMatch Offers” 1505, is an offer for the seller 1405to trade his week in North Lake Lodges for a vacation in San Antonio.The system indicates that there are a total of three parties involved inthe trade and that in order for the offer to be valid, the seller 1405would need to accept a lower cash offer of $66.66 as compared to the$100 that the seller 1405 had indicated in his desire 1415 (FIG. 14).

Similar examples as described above may be used to determine cycleswithin an English auction format involving multi-party trades acrossmarketplaces and across auctions. Similar methods of offer generationthat take into account whether the cycles are positive, negative orneutral may also be used.

FIG. 16 illustrates an English auction where a system has detectedmulti-party opportunities across auctions and marketplaces that resultin a part-barter, part-auction, and part-retail purchase. According tothe example embodiment, a positive cash cycle exists that results fromtransactions across multiple marketplaces, where an arbitrage isreturned to a trading party. As described above, however, this arbitragevalue may alternatively be retained by an exchange intermediary orshared among the various parties.

Due to the presence of information asymmetries across marketplaces thatcan be separated by time, physical location, or differences in the userbases of marketplaces (particularly in electronic marketplaces), partiesthat participate in one marketplace as sellers or buyers need notparticipate in another. FIG. 16 illustrates one such instance thatcombines English auctions to yield barter and cash trades. The auctionis a positive value cycle English auction, because positive value cyclesmay be arbitraged across marketplaces and across auctions. FIG. 16 isseparated into two parts: a “Sell Side” and a “Buy Side.” For a givenauction, the Sell Side shows information about the seller and the BuySide shows information about the bidders.

FIG. 16 shows four marketplaces Alpha 1605 a, Beta 1605 b, Theta 1605 cand Gamma 1605 d, each with one respective seller, namely party 1 1610a, party 2 1610 b, party 3 1610 c, and party 4 1610 d. Because these areseparate marketplaces 1605 a-d, there may be considerable informationasymmetry across the marketplaces 1605 a-d, resulting in differentprices and bids for the same items across the different marketplaces1605 a-d.

The possible results:

-   -   1. No Arbitrage Solution: Party 1 trades Item A with Party 4 and        Party 4 pays Party 1 an amount of $350 and also gives Party 1        Item A. Party 2 trades gives Party 3 Item A and pays $250. In        return Party 2 gets Item B.    -   2. Arbitrage Solution: same as above except Party 4 pays $600        instead of $500 and the intermediary keeps the arbitrage or        could be shared with Party 1 and Party 4.

In marketplace Alpha 1605 a, party 1 1610 a is the seller of item A 1615a in an auction that also has a “Buy Now” retail price of $500 and anauction “Reserve Price” of $400. The “Buy Now” price indicates that anybuyer or bidder can stop the auction by paying the seller 1610 a the BuyNow price of $500. The auction Reserve Price indicates that party 1 1605a will not accept a price less than $400 as a bid for the product, or,in other words, the minimum bid for the auction is $400. However, inthis example, party 1 1605 a has not received any bids for item A 1615a.

In marketplace Beta 1605 b, party 2 1610 b is also selling another ofthe same item A 1615 b, where item A 1615 a, 1615 b is a standardizedwidget of which multiple identical items can be produced. Party 2 1610 bhas stipulated a Buy Now price of $700 and an auction Reserve Price of$400. There are two bidders for item A 1615 b. The bidders are party 41610 d, with a bid of $600, and party 3 1610 c, with a higher bid of$650. In marketplace Theta 1605 c, party 3 is the seller of item B 1615c with an auction Reserve Price of $800 and no Buy Now price is set.There is one bidder for item B 1615 c, in that party 2 1610 b has bid anamount of $900. In marketplace Gamma 1605 d, party 4 1610 d is theseller of item C 1615 d. Party 4 1610 d has an auction Reserve Price of$100 and no Buy Now price is set. There is one bidder for item C 1615 d,in that party 1 1610 a has bid an amount of $150.

In this example, several possible outcomes may be provided by acomputerized program of the system based on parameter settings andconfigurations of the system. Some example outcomes include:

a) An offer may be created so that party 2 1610 b and party 3 1610 c mayexchange items A 1615 b and B 1615 c among themselves, and party 2 1610b may pay party 3 1610 c $250 in addition to receiving item B 1615 c.This is possible because, party 3 1610 c is the highest bidder in party2's 1610 b auction and party 2 1610 b is the only bidder in party 3's1610 c auction. Because party 2 1610 b bid $900 for item B 1615 c andparty 3 1610 c bid $650 for item A 1615 b, the difference between thetwo amounts (e.g., $250) is owed by party 2 1610 b to party 3 1610 c;and

b) Party 4 1610 d, having lost the auction for item A 1615 b in party2's 1610 b auction, is made an offer based on party l′s 1610 a auction,in which party 4 1610 d did not bid. FIG. 17 illustrates an example inwhich the system detects an opportunity for bidders bidding in auctionsto trade with sellers in whose auctions they have not bid. The absenceof a bid can be the result of information asymmetries acrossmarketplaces. Put another way, party 4 1610 d may not be aware of party1's 1610 a auction. Additionally, price differences for identical items1615 a, 1615 b across the auctions in marketplaces Alpha 1605 a and Beta1605 b are also possible due to information asymmetries. Put anotherway, party 1 1610 a was possibly not aware of the auction and bids inmarketplace Beta 1605 b. The offer created by the system may be an offerfor party 4 1610 d to exchange item C 1615 d for party 1's 1610 a item A1615 a and to also pay an additional cash amount of $350. This isrecommended, since the Buy Now price for item A 1615 a in marketplaceAlpha 1605 a is $500, and party l′s 1610 a bid for party 4's 1610 d itemC 1615 d is $150. The difference in value between the two items is $350that may be owed by party 4 1610 d to party 1 1610 a to complete theexchange based on the values disclosed in the auctions and bids.

There is an opportunity for an exchange intermediary to take advantageof an arbitrage presented in a positive value cycle. The arbitrageresults from Party 4 1610 d being willing to pay $600 for item A 1615 bin marketplace Beta 1605 b. However, this is shown as being returned toparty 4 1610 d based on the recommendation in outcome (b) above. Thesystem can be constructed to show negative or neutral value cycles byhaving party 4 1610 d bid $450 to yield a negative value cycle and $500to yield a neutral value cycle. However, the system may also beconfigured to take advantage of the arbitrage present acrossmarketplaces, multiple auctions, bids, and parties in a manner thatbenefits one or more parties, including intermediaries.

FIG. 17 illustrates another embodiment, in which bidder 1 110 a in thefirst marketplace 100 is engaged in an asset exchange with seller 2 405in a second marketplace 135. Two marketplaces 100, 135 are depicted bytwo clouds and the exchange is depicted by two lines with arrowsdepicting the direction of the transfer. A third line with no arrows isshown to connect the two marketplaces 100, 135. This can be anynetworking and communication based connection that facilitates the freeflow of information between the two marketplaces. Such an exchange isenabled by allowing the system to infer the seller's 405 and bidder's110 a desires through multiple methods, including explicitrepresentations of those desires by the seller 405 and bidder 110 a. Insome embodiments, the explicit representations are registered throughrespective asset managers 130 a, 1225 or inferred from past transactionhistories within the same or other marketplaces, past or present bids,or auctions within the same marketplace or other marketplaces. Committedand uncommitted desires may also be used in the example embodiment.Thus, automated execution of trades is possible, and in addition, offersmay be contingent on the acceptance of all parties to the trade.

While this invention has been particularly shown and described withreferences to example embodiments thereof, it will be understood bythose skilled in the art that various changes in form and details may bemade therein without departing from the scope of the inventionencompassed by the appended claims.

It should be understood that the flow diagram of FIG. 5 is an examplethat can include more or fewer components, be partitioned into subunits,or be implemented in different combinations. Moreover, the flow diagrammay be implemented in hardware, firmware, or software. If implemented insoftware, the software may be written in any software language suitablefor use in the networks and devices illustrated in FIGS. 1, 3, 4, 6-8,12, 13, and 17, for example. The software may be embodied on any form ofcomputer readable medium, such as RAM, ROM, or magnetic or optical disk,and loaded and executed by generic or custom processor(s).

What is claimed is:
 1. A method of operating an auction, the methodcomprising: offering a bidder's bidding asset, in the form of arepresentation of the bidding asset, to a seller of an auction asset inexchange for the seller's auction asset, the bidder already bidding on abid-on auction asset that is different from the seller's auction asset.